So, you’ve decided to expand your workforce and prepare your company for new and more challenging tasks. However, as your company grows, you may become entangled in human resources (HR) issues.
Growth might complicate matters for organizations that aren’t ready to hire a full-time HR employee. Just think of managing the health insurance of all of these new employees. Fortunately, there are several ways to get HR support for your small company, and one of them is via a professional employer organization (PEO).
And one of the glowing benefits of partnering with a PEO is getting a PEO health insurance plan. If you’re unfamiliar with the inner-workings of a professional employer organization and how it can manage employee benefits, don’t worry. You’ve come to the right place.
Keep on reading for our full breakdown of everything you need to know about a PEO health insurance plan.
Understanding Your Health Insurance Options
You can give your staff health insurance coverage via a variety of means.
Purchasing it straight from the insurance provider will save you time and money. After all, you won’t have to rely on an intermediary to get you the best deals. You might delegate the work to a health insurance broker specializing in this kind of insurance. Having a broker on your side might help you get the best deal possible from insurance providers.
So you work for a small business but want to get health insurance at the same low prices as major organizations? You’ll want to consider joining a Professional Employer Organization (PEO). PEOs often have a more comprehensive benefits package.
Generally speaking, a PEO gives employees access to wellness benefits. These include fitness and mental health, as well as 401(k) plans with many investment alternatives. Payroll, HR resources, and compliance assistance are all standard services offered by PEOs.
PEO 101: An Overview
HR tasks are outsourced to PEOs by small and medium-sized firms. A PEO can handle all of your payroll and benefits administration and any legal compliance difficulties. The amount of outsourcing you do depends on your company’s requirements and the PEO’s offerings.
A co-employment agreement is signed between you and the PEO when you work together as a team. A PEO becomes their employer of record for your workers via this arrangement. Changing your company’s name on your workers’ paychecks and tax records directly impacts your business. There is no loss of control over your company’s operations.
If you’re interested in learning more about these services, you should check out this great living example of what the market offers.
The PEO Health Insurance Plan
By signing a co-employment agreement with PEO, you’ll be able to provide all of your workers with access to a single health insurance plan.
Employees may now have access to health insurance that is often too expensive for most small enterprises to provide. Insurance firms may provide their higher-tier plans at reasonable pricing because they have a bigger pool of workers to bear the risk of an employee being ill.
On the other hand, the PEO you join determines which health insurance is accessible to your workers. Because of the size of the PEO and the decisions they make, you may not be happy with the health plan alternatives accessible to you.
The Advantages of Partnering With a PEO
Choosing a PEO with plans and providers tailored to your company and workers is essential as an employer. PEOs function as co-employers, allowing their clients’ workers to share a single pool of benefits. When it comes to health insurance, a PEO often gives access to the particular insurers for its plans.
PEOs don’t just provide health insurance; they go above and beyond to meet the needs of their consumers. Your firm will function more smoothly with the aid of a PEO, which provides high-quality human resources support and compliance support as well as payroll.
Finding the Right PEO Is Critical
When lowering employee turnover, making sure your staff are satisfied with their work is a critical step. If the health insurance provided by your PEO does not meet the requirements of your employees, you may have to start seeking new staff after signing on with them.
A PEO search might be a daunting one. NAPEO estimates that you have more than a thousand options for PEO partners. Choosing the proper service provider for your company, including a health plan that meets your requirements, may take up your time.
What Is the Average Cost of a PEO?
Getting your mind around PEO pricing is critical. You may break down a PEO’s fees into two primary categories. It’s either a percentage of payroll or a per-employee-per-month (PEPM).
You will send workers’ compensation and employer practice liability insurance (EPLI), a percentage of your entire payroll, to your PEO when it comes to taxes.
In addition, you’ll want to look out for the additional administrative charges. The PEO’s administration charge varies per employee and fluctuates throughout the year, which might complicate bookkeeping.
On the other hand, when you join up for PEPM, you negotiate the charge directly with the PEO. You’ll need to pay a separate setup charge, which may run into the thousands. In addition, it excludes any extra payments for optional products or services, such as processing payroll outside of the normal cycle.
A PEO as a Business Partner
Choosing a professional employer organization (PEO) may be the best option if you want to provide your workers with health insurance at the exact low costs as major firms while also providing other services. We hope that our guide has shed some light on the nuances of getting a PEO health insurance plan.
And, if you require additional information on growing your business, you should head straight for our business section for all of our other tips and explainers.